Video Conferencing Firm Zoom Prices IPO Above Range Reaching $9B Valuation
Zoom prices its initial public offering above expectations at $36 per share, giving the profitable video conferencing company a $9 billion market cap. The strong demand highlights investor appetite for a rare tech unicorn that boasts rapid revenue growth and shrinking losses.
Zoom defies market expectations by pricing its initial public offering above its planned range at $36 per share. The video conferencing company initially expected to price shares between $28 and $32, but boosts its target due to strong investor demand for a profitable tech business. This pricing gives Zoom an initial market capitalization of roughly $9 billion, which equals nine times its most recent private market valuation.
The successful offering allows Zoom to raise approximately $350 million in new capital through the sale of 9.9 million Class A common shares. The company shows impressive financial metrics, including $330 million in revenue for the year ending January 31, 2019, which represents a doubling of its revenue from the previous year. Additionally, Zoom continuously shrinks its net losses, dropping from $14 million in 2017 to just $7.5 million in 2019.
Zoom makes its public debut on the Nasdaq under the ticker symbol "ZM" on the exact same day that Pinterest goes public on the NYSE. Both companies experience high demand and price their shares above their initial ranges. Major venture capital firms like Emergence Capital and Sequoia Capital back Zoom, holding significant pre-IPO stakes in the now highly valued enterprise.